09 June 2011

A division of labour for aid

Outgoing DFID Permanent Secretary Nemat Shafik proposes a division of labour for the major actors in foreign assistance; sounds pretty sensible to me.
United Nations: No other organisation has the legitimacy that comes from universal membership.  This makes the UN uniquely placed to be the leading agency on politically sensitive issues like conflict, peace and security, humanitarian matters, peacekeeping and peace-building.  In those contexts where national governments are often weak, the UN has to play an important role in coordinating the activities of international actors (such as through the cluster system in humanitarian crises). Its universal membership also makes it an ideal place to agree many global norms and standards (maritime rules, global health standards, etc.).   The UN has many able competitors in the delivery of more conventional development programmes. 
World Bank and the Regional Development Banks: The international financial institutions are best positioned to lead on large scale development finance in states that can afford to borrow and have the capacity to manage programmes on their own.  They could be the major source (along with private capital markets) of funding for middle income countries with major poverty issues (such as India, Brazil, Indonesia) as well as well-performing low-income countries (Ghana, Vietnam, Tanzania).  The regional banks have a unique role to play on regional integration issues. 
Bilateral Agencies: Grant financing will remain important to supporting delivery of basic social services in many low income countries for many years ahead.  Bilateral donors who face strong taxpayer pressure to deliver tangible results have a comparative advantage in funding education and health services in the poorest countries, particularly in fragile states where they can work alongside the UN.  For now, new bilateral donors are likely to focus on aid financing facilitation of commercial links and  technical assistance (such as China’s tradition of sending doctors to Africa or Brazil’s sharing of its experience on treating HIV or managing cash transfers) where their recent experience is often more relevant to their partners.  Most bilateral agencies will be the repository of national support for global problem solving such as funding for climate finance, global health or conflict prevention, reconstruction and stabilisation. 
Foundations: Private philanthropists can afford to take risks that public funders cannot. They have a huge comparative advantage in being the “venture capitalists” who invest in development innovation.  This can include technology (such as the Gates Foundation’s investments in new vaccines) but can also include innovations in delivery mechanisms, accountability, and programme design. 
Civil Society: In all countries, civil society groups have a unique role to play in holding governments and, increasingly, the private sector to account.  In many contexts they empower disadvantaged groups to demand and exercise their rights.  They also deliver essential services where states cannot operate or where governments choose to deliver services through them. 

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